Value Chain Thinking:

A Trainers Manual
Benjamin Dent, John Macharia, and Agatha Aloyce

HORTI
Published by
World Vegetable Center
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ISBN 92-9058-226-X

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Suggested citation
Dent B, Macharia J, Aloyce A. 2017. Value Chain Thinking: A Trainers Manual. World Vegetable Center,
Shanhua, Taiwan. Publication 17-825. 57 p.
 Value Chain Thinking:
A Trainers Manual

Benjamin Dent1, John Macharia2, Agatha Aloyce3

1
Value Chain Management International (VCMI)
2
World Vegetable Center (WorldVeg)
3
Horticultural Research and Training Institute (HORTI-Tengeru)
Authors

Dr Benjamin Dent, a PhD in Sustainable Value Chain Analysis from the University of
Queensland, Australia, is a Senior Associate with Value Chain Management International.
He specialises in improving supply chains competitiveness through collaboration and
understanding markets. He advises multinational firms, small and medium enterprises
and family farms/smallholders, and partners with NGOs, universities and development
organisations, most recently in North America, Australia and Eastern and Southern
Africa. He is the co-author of A Guide to Value Chain Analysis and Development for
Overseas Development Assistance Projects. Contact: [email protected]

Dr. John Macharia holds a PhD in Agribusiness from the University of Queensland,
Australia. His key objective is to promote responsiveness, profitability, and innovation
of agricultural small and medium enterprises in Eastern and Southern Africa for greater
value to consumers, higher returns and environmental resilience. His professional
background encompasses project management, community engagement, consumer and
market research, business plan development, capacity building, gender mainstreaming,
and value chain analysis. He has authored/co-authored several publications, users guides
and tools kits on various agri-food supply chain topics.

Ms. Agatha Aloyce, an Agricultural Research Officer in the Tanzanian Ministry of

Agriculture, is a pathologist and horticultural value chain expert. She served as the
country coordinator on the ACIAR-funded Improving income and nutrition in Eastern and
Southern Africa by enhancing vegetable-based farming and food systems in peri-urban
corridors (VINESA) project and in this role delivered value chain thinking training to 120
farmers. She facilitated the formation of a Vegetable Value Chain Farmers group in the
Arusha region to foster farmers collective action to meet consumer demand and earn
more cash. Ms. Aloyce coordinated several value chain programs including the Australia -
Africa Agribusiness course, in which she facilitated access of participants to local site visits
through her networks.
Contents

EXECUTIVE SUMMARY

CHAPTER ONE: Course Overview 7

1.1 Intended audience 7
1.2 Course principles, structure and relevance 7
1.3 Ensuring gender sensitivity 8

CHAPTER TWO: Introduction to Value Chain Thinking 10

2.1 What is a Value Chain? 10
2.2 What is Value Chain Thinking? 11
2.3 Value Chain Thinking in practice 13
2.4 Common mistakes in Value Chain Thinking 23

CHAPTER THREE: Training Activities 24

3.1 Course structure 24
3.2 Activity 1 Mapping the chain and reducing waste 24
3.3 Preparing for Activities 2, 3 and 4: Identifying market opportunities 29
3.4 Activity 2 What do consumers want? 29
3.5 Activity 3 What do customers want? 31
3.6 Activity 4 Creating Value 32
3.7 Activity 5 Postharvest opportunities for farmers 36
3.8 Activity 6 Working as Partners: How to pick partners and build relationships 37
3.9 Activity 7 Learning from an existing vegetable value chain 40
3.10 Activity 8 Gender equity in Value Chains 41
3.11 Activity 9 Preparing an Action Plan 42

CHAPTER FOUR: 7 Steps to Connecting Farmers to New Markets 44

Step 1: Create a list of potential market opportunities 46
Step 2: Identify farmers strengths and limitations 48
Step 3: Compare market opportunities with farmers strengths and limitations 50
Step 4: Investigate the short list in detail 51
Step 5: Let farmers decide 54
Step 6: Value Chain meetings 55
Step 7: Finalise action plan with farmers 56

References 57
EXECUTIVE SUMMARY
Value chains are interactive systems, with the Chapter One gives an overview covering the
flow of products, money and information highly intended audience; course principles, content and
dependent upon relationships throughout the sources; and importance of gender sensitivity.
system. Value Chain Thinking takes a whole-of-
chain perspective, emphasising the importance of Chapter Two gives an introduction to Value Chain
market orientation and collaboration. It highlights Thinking, including: what is a value chain; how
how effective partners align their skills, resources Value Chain Thinking increase farmers incomes;
and behaviour to deliver higher value products and and Value Chain Thinking in practice.
services and to reduce waste, with the resultant
financial returns being distributed equitably to Chapter Three provides a briefing for the training
sustain partners commitment. course itself. It sets out eight activities from
which trainers can select how best to help each
This manual helps trainers to teach Value Chain participant develop an action plan. These include:
Thinking principles and decision-making processes, identifying market opportunities, especially the
and provides a structure for participants to product qualities and service levels needed to
develop an Action Plan which draws together their access those opportunities; mapping the value
skills in production, postharvest activities and chain, from critical input suppliers to the final
Value Chain Thinking. It was developed and tested customer and end consumers, and so learning
during Training of Trainers courses in Ethiopia, where value can be created and waste can be
Malawi, Mozambique and Tanzania in 2013-2017 reduced across the whole chain; prioritising their
under the Australian Centre for International own contribution to the value chain: what skills,
Agriculture Research (ACIAR)-funded project resources and inputs should they focus upon to
Improving Income and Nutrition in Eastern and become a key partner in the chain, and building
Southern Africa by Enhancing Vegetable-based relationships with other key partners.
Farming and Food Systems in Peri-urban Corridors
(VINESA). Chapter Four offers a 7-Step Guide to Connecting
Farmers to New Markets. This is a low cost,
The case studies presented are about vegetables participative process to identify and evaluate
in developing countries, and the activities are market opportunities, and then develop an action
designed for vegetable smallholders in similar plan based on Value Chain Thinking. To download
countries. However, this manual could be readily a separate .pdf of this chapter:
applied to other agricultural sectors in a variety of
contexts, and to other members in those chains, https://avrdc.org/wpfb-file/7-steps-practical-guide_fact-sheet-
whether extension officers, input suppliers, rev2-pdf/
traders or retailers. It will help them to: develop
a whole-of-chain perspective, and a market-
orientated focus; understand the interdependence
within chains, and consequently the benefit of
building effective partnerships, rather than relying
on transactional relationships; assess market
opportunities and the suppliers and customers
needed to exploit them; to select, produce and
process the most promising crops; and to develop
and execute an action plan that will increase their
income.
 A Trainers Manual 7

CHAPTER ONE
Course Overview
1.1 Intended audience have access. Market opportunities are dynamic,
so participants need the skills to adapt to the
This course is designed for intermediate, literate future. Accordingly, this trainers course provides
trainers from training, research and extension a framework for individuals to make their own
services providers. While prior knowledge of value decisions and action plans.
chain principles or practice is not essential, course
participants need to be experienced, trained and Adapt to local conditions: The course needs
enthusiastic about how developing Value Chain to reflect farmers circumstances in terms of
Thinking (VCT) will supplement smallholders production environment; market opportunities
production and postharvest skills and increase and constraints, especially routes to market; and
their income. While the course can be given based the culture of their operations. Trainers should
on the activities identified in Chapter Three, it reflect on their local knowledge and try different
would be helpful if the trainers have the ambition, approaches, then record what they tested and
knowledge and confidence to adapt the generic what they concluded so they can build on their
material to suit their local circumstances (culture, own experiences. This should include the topics,
market, products, etc.). Additionally, it would be issues and activities covered; the exercises and
helpful if those selected for this training have examples used; the value chain maps produced
some understanding of how gender issues could and the action plans which resulted. This may well
enhance or impede the application of Value Chain include the need to train other members of value
Thinking within agri-food supply chains. During the chains.
training, it is necessary to recognize that gender
constraints may prevent men and women from Participative: The manual is designed around
benefiting equitably from participation in high exercises, not lectures. This in line with the saying:
value agri-food chains. What we hear, we forget; what we see, we
remember; what we do, we understand.

1.2 Course principles, Built-in flexibility: When we tested the manual,

it became clear that rather than a linear design,
structure and relevance which prescribed that trainers work through all
nine activities in turn, the course needed to allow
1.2.1 Principles behind VCT course trainers to select activities based on the needs
of the trainees and their own confidence and
Build participants capacity: One of the core comfort with the material. Hence the structure
objectives of Value Chain Thinking is moving was revised, as set out in the next section.
farmers from an attitude of Selling what I
produce to Producing what I can sell i.e., do 1.2.2 Course structure
not grow as much as possible, nor grow just more
of the same, but rather grow what can be sold The course structure is based on participants
most profitably. However, there is no single right learning about Value Chain Thinking and then
answer; what is best for each participant will developing their own Action Plan (Figure 1.1).
depend upon their own situation, for example, the How many of the activities are covered will
balance between growing for their familys own depend on the trainers experience, the trainees
consumption and growing for sale, and the land, needs, and the time and resources available.
labour, finance and other resources to which they
8 Value Chain Thinking

1.2.3 Sources 1.3 Ensuring gender

The approach proposed incorporates experience
from previous ACIAR projects, the Learning sensitivity
Alliance Process developed by the Dutch Royal Women undertake many of the core roles in many
Tropical Institute in Ethiopia (Belt et al., 2011); agri-food value chains in developing countries, yet
USAIDs Value Chain Systems Training, and a women have a subordinate position in many of
number of projects in collaboration with Professors those societies (World Bank, 1990). For example,
Ray Collins and Andrew Fearne, and Associate there are complicated sets of social relations and
Professor Laurie Bonney. In particular, applying a norms conferring access to, use of, and ownership
value chain framework to development projects is of land between men and women. Gender
provided in another ACIAR publication, A guide to relations and power, as well as overlapping legal
value-chain analysis and development for overseas and customary law, determine these rights within
development assistance projects (Collins et al., both the household and community (Moser,
2015; download at http://aciar.gov.au/publication/ 1993). Typically, these social relations also prevent
mn178); Chapter Two draws directly on the deeper women from participating in and benefiting
explanation offered in that guide.

Figure 1.1: Value Chain Thinking training course structure

 A Trainers Manual 9

from Value Chain Thinking, particularly in terms

of access to resources, decisionmaking and
negotiations. To achieve the desired development
outcomes, all activities in this manual must be
designed to be sensitive to gender distinctions,
and delivery must integrate women and their
distinguishing needs. Trainers need to understand
the relevance of gender in the context, design,
implementation and monitoring of this training
course, and use this opportunity to strengthen
womens role in vegetable value chains (Kabeer,
2003). It is essential that this training is provided
in ways that are as accessible and relevant to
female participants as to male ones. This might
involve training women and men separately,
providing childcare, or covering expenses such as
transport.

References
Belt J, Goris W, Debela S, Kefyalew F, Smulders E,
Visser P (2011). Learning and earning: How a
value chain learning alliance strengthens farmer
entrepreneurship in Ethiopia. KIT Bulletin 395,
KIT Publishers, Amsterdam. Available at https://
www.cordaid.org/en/publications/learning-
and-earning-how-value-chain-learning-alliance-
strengthens-farmer-entrepreneurship-ethiopia/
Collins R, Dent B, Bonney L (2015). A Guide to Value
Chain Analysis and Development for Overseas
Development Assistance Projects. Available at
http://aciar.gov.au/publication/mn178.
Kabeer N (2003). Gender mainstreaming in poverty
eradication and Millennium Development Goals.
Commonwealth Secretariat, London.
Moser CON (1993). Gender Planning and Development:
Theory, Practice and Training. Routledge, London.
World Bank (1990). Agricultural Growth and
Strategic Options, Washington DC, USA.
World Bank (1990). Agricultural Growth and Strategic
Options, Washington DC, USA.
10 Value Chain Thinking

CHAPTER TWO
Introduction to Value Chain Thinking
2.1 What is a Value Chain?
There are many definitions of value chains, and depends on the extent of trust and commitment
much discussion over the distinction between between trading partners (Macharia et al., 2013).
value chains and supply chainsIt is essential that The critical lesson is that farmers decisions should
the approach used in this training is set out clearly be taken based on an understanding of market
and applied consistently. opportunities and the whole chain, rather than
looking at their own part of the chain in isolation.
Value chains are interactive systems, with
products, money and information flowing through Within value chains, individuals or firms
them, all reliant on relationships (Fearne and can undertake more than one function, and
Hughes, 1999) (Figure 1.2). The critical point is information does not have to flow linearly:
that the only source of money into the chain seed suppliers can conduct their own consumer
(other than credit or subsidies/aid) comes from research while farmers can speak directly to
consumers. Accordingly, a value chains economic retailers. However, if each actor only knows about
success depends on delivering a product from their own direct suppliers and customers, because
seed, through production, processing and of chain-wide interdependence in the flow of
transport, which appeals to those consumers products and money, they are vulnerable to lower
being served by the retailer. Achieving that returns because of unknown problems in other
objective relies on the effective flow and use parts of the chain.
of information along the chain, which usually

Figure 2.1: A generic value chain

 A Trainers Manual 11

2.2 What is Value Chain Thinking?

One way of understanding Value Chain Thinking is

to contrast supply chains and value chains.

Think of the money in both chains as a pie.

Consumers determine the size of the pie because
they decide whether or not they are going to buy
a product and how much they are willing to pay
for it.

Supply chains push products from upstream, with

farmers adopting a production-focused attitude
of selling what they produce. Products do not
reflect the specific requirements of particular
market segments, and so consumers decide Figure 2.2: Supply chain strategy of growing
what to buy mostly on price, rather than their individual slices of the pie
preferences (Collins et al., 2015). As a result, to
increase their incomes, everyone in the chain has
to compete with each other to try to make their but work together to grow, process and
slice of the pie bigger by making someone elses deliver products to meet the expectations of
slice smaller (Figure 2.2). In these supply chains, specific consumers, which means retailers can
everyone behaves in an opportunistic manner. attract more shoppers and if the product
Customers switch suppliers whenever they can meets their particular consumers needs,
get what they need a little cheaper elsewhere; they might even be willing to pay more.
suppliers will let down customers if they get a
better offer from someone else. The relationships
are transactional: there is neither trust nor
commitment. Information about product prices,
volumes and standards does not flow freely along
the chain.

In contrast, a value chains product is pulled by

consumers, with farmers adopting a market-
orientated attitude of producing what they
can sell (Collins et al., 2015). Everyone works
towards supplying the same market opportunity,
and so avoids competing solely on price. The pie
gets bigger with everyones slice growing without
stealing part of someone elses (Figure 2.3).
Relationships are stable and stronger, with greater
collaboration and sharing of information, because
people along the chain want to work together as
Figure 2.3: Value chain strategy of
preferred suppliers and customers.
cooperatively growing the pie
Growing the pie requires Value Chain Thinking
(Figure 2.4). This involves a collective decision
amongst those involved in the chain to change
their objectives and behaviour. In effective
value chains, firms do not act in isolation,
12 Value Chain Thinking

An efficient chain produces what shoppers want Essentially, this involves reducing the intensity of
when they want it; there is less wastage, and competition. When a farmer produces the same
revenue increases. When the benefits of this are product as many other farmers and does not
shared across the chain, suppliers and customers offer better service to customers, the only way
become partners. customers and consumers choose suppliers is on
Value Chain Thinking increases farmers incomes price. Contrastingly, Value Chain Thinking enables
when they: a farmer to stand out from the crowd by growing a
crop suited to a particular market, and by offering
understand market opportunities, better services to those customers which give
and focus on producing what those access to that market. The farmer thus becomes
consumers want and, a much more attractive supplier, and reduces
become preferred suppliers by providing competition since customers make choices based
more suitable products and superior on factors other than just price. The potential for
service to customers, for example in the farmers income to increase rises.
terms of reliability.

Supply Chain Thinking Value Chain Thinking

Growing your slice Growing the pie
Compete on price Compete on value
Independence and self-interest Interdependence and mutual interest
Flexible, transactional relationships Stable, collaborative relationships
Short-term trading Long-term planning
Suppliers chosen on quality and cost Suppliers selected for quality, skills, service and partnership
Suppliers are price takers Prices negotiated
Opportunism Commitment
Limited information sharing Open communication

Figure 2.4: Contrasting Supply Chain Thinking and Value Chain Thinking
 A Trainers Manual 13

2.3 Value Chain Thinking in practice In considering these questions, it is critical to

recognise that consumers are not all the same
and they do not want the same product, so value
Value Chain Thinking can be considered as a four- chains need to understand specific consumers
piece puzzle, with every piece needed to complete needs, and how they can work together to
it (Figure 2.5). Each piece is explained below. deliver those needs. Only then can the chain
grow the pie by selling more, ideally at a higher
Puzzle Piece No. 1: Understand Consumers price, to those specific consumers. This involves
deciding priorities for the resources (time,
Since consumers determine the size of the pie, it money, skills, land, etc.) for each member of the
is essential to understand what they want from a chain. For example, retailers need to understand
particular product. This may include asking such how to meet shoppers needs better than the
questions as: competition, with seed suppliers, farmers and
wholesalers using their resources to supply
What product characteristics will change retailers with the quality and quantity of products
their behaviour? most suitable for their shoppers. Two case studies
How much do they buy? of this market-oriented approach are given in Case
How frequently? Studies 1 and 2 highlighted in the boxes.
How many of them buy it?
Where do they buy it?
How much they are willing to pay for it?

Figure 2.5: The Four Piece Puzzle of Value Chain Thinking

14 Value Chain Thinking

To increase the size of

the pie, value chains
need to understand what
consumers want, especially
higher values consumers

There are many different types of market 1. What products, and

opportunities, which include:
what characteristics
Displacing existing suppliers whose of those products, are
customers are finding them unreliable shoppers looking for?
Import substitution
New products
Opportunities currently being missed, 2. Which crops and how
for example supplying new consumer
segments, such as non-indigenous
much should I grow; and
ethnic minorities, or a returning how should I grow them?
diaspora who have developed new
tastes while abroad
3. Can I process those
This process can include processing products in crops to make them more
ways to make them more attractive to potential
consumers. For vegetables, this may include
attractive/valuable to
increasing their shelf-life, convenience, or taste consumers?
(Figure 2.6).

It is critical to distinguish between adding value

based on personal preferences or assumptions
about consumers, and value creation based on
market research. Anecdotes are not evidence.
Overall, the understanding consumers piece
of the Value Chain Thinking puzzle should lead
farmers to ask:
 A Trainers Manual 15

Figure 2.6: Processed products are

attractive to consumers and have longer
shelf-life. Food can be dried and packaged,
or processed into sauces, jams and other
products.
16 Value Chain Thinking

Box 2: Case study on Iraq al Amir

Women Association, Ammam, Jordan
Market opportunity: Vegetables which
guarantee safer production systems, and better
returns for farmers

Product: A brand of low/safe pesticide-

CASE STUDY 1: Harvest of Hope produced spring/green onions, with 75% of
final price paid to farmers. The farmers also
Vegetable Box Scheme, Cape Flats use a new variety of onion, which does not
ownship, Cape Town, South Africa flower as early, can be harvested later when
prices were higher, and has a longer shelf-life.
Market opportunity: A group of consumers
wanting healthier vegetables grown with less/ Participants: 42 farmers working within a
safer chemicals. womens cooperative.

Product: Organically grown vegetables, Benefits to farmers: On average, households

delivered directly to shoppers initially via improved their income by 20%.
pick-up points at primary schools, but now The project required improved production
with 29 collection points. The approach helps skills in soil fertility and pest and disease
to offset the unavoidable variability in yield, management, as well as extending activities
timing and quality of different crops, since the into postharvest processing by cleaning the
vegetable boxes content can be adjusted to onions in the field, grading at household
reflect availability. Collectively, the farmers level, and then packing at cooperative level.
earn US $7000/month. The association developed its own brand to
communicate origin and responsible/healthy
Participants: Now involving over 140 produce to consumers, improving recognition
urban smallholders, organised by Abalimi and aiding repeat purchasing. Farmers also
Bezekhaya (Farmers of Home) as part of plant seedlings rather than seed to shorten
Harvest of Hope, established in 2008. crop cycles and reduce losses from seeds not
germinating. Participants are charged a fee of
Benefits to farmers: 8% of their gross revenue from sales towards
Access to markets outside their local costs of marketing, packaging and transport.
community;
Secure contracts/monthly income; Further details: Urban Agriculture
Bulk purchase of inputs reduces costs, magazine, Number 25, September 2011,
and page 54. http://www.ruaf.org/sites/default/
Working in the packing shed earns files/BDU-11031-UAM%2025_0.pdf
additional income and helps to build
farmers understanding of downstream
activities, which feeds back into how they
farm.

As a further example of Value Chain Thinking,

the organisers responded to feedback from
their consumers, some of whom criticised
the lack of variety and out-of-season produce
The associations own
caused by reliance on locally-grown fresh responsible production
produce. As a result, the organisers introduced brand logo
supplementary products from other sources,
and so attracted more consumers.

Further details: https://www.youtube.com/

watch?v=4-qsAB7pw-U
 A Trainers Manual 17

Reducing waste increases

the size of the pie

Puzzle Piece No. 2: Reduce Waste

Studies from the World Vegetable Center have double the shelf-life of vegetables. A product that
established that across vegetable chains losses would keep for 8 days at 12 C, only lasts for 4 days
range from 30-80% (Srinivasulu et al., 2015). One at 22 C.
of the main causes identified by these studies is
damage due to lack of proper packaging (Figures Given the high outdoor temperatures in Eastern
2.7 and 2.8). For example, as shown below, poor and Southern Africa, especially in the direct sun,
quality and over-packed wooden crates have 30 this can make a very significant difference to
50% damage. postharvest losses. Low cost cooling techniques,
like shading and brick evaporative coolers as
Another significant cause of waste is lack of proper shown below, can generate cost-effective returns
cooling, since a 10 C drop in temperature can (Figures 2.9 and 2.10).

Figures 2.7 and 2.8: Losses of tomatoes caused by poor packaging during transit
18 Value Chain Thinking

Figures 2.9 and 2.10: Use of simple technologies such as shade covers and evaporative
coolers prolongs shelf-life of vegetables.

However, it is important to remember that waste The Reduce Waste piece of the Value Chain
means more than just any product that does not Thinking puzzle should lead farmers to ask:
reach a consumer. It also includes:

Any product that sells for a lower price

1. Where does waste occur
than it could sell for elsewhere on-farm and downstream in
Making a product better than it needs the supply chain?
to be
Unnecessary activities, or applying
unnecessary/excessive inputs 2. And so, what can I do
differently to reduce waste
on-farm and downstream?
This is discussed in Exercise 1 under Section 3.3.3.
 A Trainers Manual 19

Delivering what customers

require provides long-
term access to markets
by becoming a preferred
supplier

Puzzle Piece No. 3: Deliver Consumers

Requirements

The requirements of final customers, i.e. The Deliver Customer Requirements piece of the
those who directly serve consumers likes Value Chain Thinking puzzle should lead farmers
shops, stallholders, restaurants and hotels, are to ask:
important because they are the gatekeepers to
the marketplace (Fearne and Hughes, 1999). As
well as wanting the quality of product sought by 1. Which potential
their shoppers or clients, priorities for customers customers best serve
typically include frequency of delivery; reliability;
grading; and packing and postharvest processing
my target shoppers/
to increase shelf-life. Meeting customers consumers?
requirements may require cooperation amongst
farmers; chain members coordinating production,
delivery and demand across the whole chain; 2. What are these
gaining new skills in postharvest processing, and customers priorities?
investing in different inputs, especially improved
seeds and certified chemicals.
3. How can I contribute
to meeting these
requirements?
20 Value Chain Thinking

Building partnerships
is hard to imitate, and
ensures the pie is divided
into larger slices

Puzzle Piece No. 4: Build Partnerships

One of the competitive strengths of Value Chain This final build partnerships piece of the puzzle
Thinking is that it involves people working should lead farmers to ask:
together (Hobbs et al., 2000). This takes time and
effort, with most value chains going through four
stages (Figure 2.8). This means collaborative value
1. Which traders and
chains are very hard to imitate, and so there is less retailers best serve my
competition because few people can copy it. As target shoppers/consumers,
trust and commitment grow, there will be greater
willingness to share information, risk and rewards. and will give me a fair
The first step is to find suppliers and customers return?
willing to work cooperativelynot all will beand
then:
2. How do I become one of
Agree to focus on consumers and their preferred suppliers?
service, not just price and volume
Learn about each others businesses,
and so see how to work better together 3. Additionally, do I need
Identify and solve problems together
Reward commitment, quality, reliability
to cooperate with other
and reducing waste farmers?
Case Study 3 in the box gives an example of what Activity 6 looks at choosing partners and building
this means in practice. relationships.
 A Trainers Manual 21

CASE STUDY 3: White haricot bean production, Shashemene, Ethiopia

Participants: Burka Gudina, a farmers marketing organisation with nearly 900 members

Value Chain Thinking in Practice: The group interviewed farmers, small local collectors, large
urban merchants, and an export trader, and identified the key problems including impurities, high
moisture content and small beans. Then, as part of solving problems together, the farmers committed
to:

Keeping their stores clean

Improving quality
Allowing buying price adjustment based on market price
Ensuring members paid back seed loans to exporter

Similarly, the exporter committed to:

Giving technical advice on store management

Checking produce before it was loaded onto trucks, and providing sacks for produce
Helping finance access to improved seeds
Providing information on the export price he received for products

Further details: http://www.ruaf.org/sites/default/files/UA%20Magazine%2024%20sept2010web%20

38-39.pdf
22 Value Chain Thinking

Figure 2.11: Evolution of a collaborative value chain.*

*Adapted from Value Chain Management Centre (2012) Characterizing the Determinants of Successful Value Chains
http://vcm-international.com/wp-content/uploads/2013/04/Characterizing-the-Determinants-of-Sus-VC-031912.pdf
 A Trainers Manual 23

2.4 Common mistakes in Value Further Reading

Chain Thinking Collins R, Dent B, Bonney L (2015). A Guide to Value
Chain Analysis and Development for Overseas
Development Assistance Projects, available at
There are five common mistakes people make that http://aciar.gov.au/publication/mn178.
prevent them from benefiting fully from Value Fearne A, Hughes D (1999). Success factors in the fresh
Chain Thinking. produce supply chain: insights from the UK.
Supply Chain Management 4 (3), 120-131.
The first mistake is to think, Its too hard. It will Harper M, Belt J, Roy R (eds) (2015). Commercial and
take time and persistence. Inclusive Value Chains: doing good and doing
well., Rugby, UK: Practical Action Publishing.
Hobbs JE, Cooney A, Fulton M (2000). Value Chains in
The second mistake is to make assumptions. These
The Agri-Food Sector: What are they, How do
might include expecting those downstream to they work and Are they for me? Department
understand what consumers value in the product. of Agricultural Economics, University of
However, most retailers sell a large number of Saskatchewan, Saskatoon, Canada.
products, so they struggle to give attention to Macharia J, Collins R, Sun T (2013). Value-based
every product, to the inevitable detriment of Consumer Segmentation: The Key to Sustainable
individual value chains. Farmers also often assume Agri-food Supply Chains. British Food Journal 115
they know what affects shopper behaviour; often (9), 1313-1328.
they do not. They can be a long way from the Srinivasulu R, Afari-Sefa V, Apurba S, Nenguwo N
(2015). Farmers Decisions to Participate in
market, and not have access to reliable or up-to-
Postharvest Training Programs and Impacts
date information. Perhaps farmers understand on Vegetable Crop Income in Tanzania. 2nd
commodity markets, where products are standard, International Conference on Global Food
but they rarely have much experience of smaller, Security, Ithaca, New York, USA, 11-14 October
niche markets where higher returns can be 2015.
found. In addition, farmers may be men, whereas
shoppers are often women, who will make
decisions on a different basis.

The third mistake is going it alone. Value Chain

Thinking only works through collaboration, both to
ensure the right product reaches the right market
opportunity, and that the resulting higher returns
are shared.

The fourth mistake is selecting the wrong partners.

Not everyone is a potential partner, since some
suppliers and customers will not be willing and
able to go through the changes in behaviour set
out in Figure 2.8 above.

The final mistake is giving up. Value Chain

Thinking is challenging, but the alternative is to
return to acting like a supply chain and competing
on price, which typically keeps farmers incomes
well behind the growth in other sectors.
24 Value Chain Thinking

CHAPTER THREE
Training Activities
3.1 Course structure Activity 6 involves farmers meeting prospective
customers, and so will take longer to organise and
This chapter of the manual explains the training carry out.
activities in detail. The structure is based around
Activity No. 9 (Core Activity) which involves Activity 7 is known as walking the chain, and can
participants developing an Action Plan for how be a valuable experience. This involves farmers
they will run their smallholding when agreements meeting members of an existing, good practice
have been made with specific customers. There chain to ask questions in order to understand the
are eight previous activities that contribute to chains structure and operations. Organising this
Activity No. 9 (see Figure 1.1 in Section 1.2.2): is a significant task, and it will require funds to
transport the farmers, and potentially compensate
Activity 1: Mapping the chain and reducing people they meet for their time.
waste
Activity 9 comes at the end and involves each
Activity 2: What do consumers want? farmer making a detailed action plan, and
potentially negotiating cooperation amongst other
Activity 3: What do customers want? farmers, and so is likely to involve several rounds
of discussions.
Activity 4: Creating value

Activity 5: Postharvest opportunities for 3.2 ACTIVITY 1: MAPPING THE

farmers
CHAIN AND REDUCING WASTE
Activity 6: Working as Partners: How to
3.2.1 Key Messages
choose partners and build relationships
1. Unless farmers supply consumers or
Activity 7: Learning from existing chains final customers themselves, they need
to work with others in the value chain,
Activity 8: Gender equity in value chains which can only start by understanding
the whole chain.
Activity 9: Preparing an Action Plan
2. Farmers need to know where waste
Trainers are encouraged to select and adapt those occurs, and what causes it.
activities which suit trainees needs, and which
reflect their own experience of the local context. 3. Reducing waste cuts farmers costs
and grows the pie.
Activities 1, 4, 5 and 8 should take one day, and
can be undertaken in a classroom, or just out in 3.2.2 Background
the field where there is a shelter.
The starting point for Value Chain Thinking is to
understand a value chains structure, and who
Activities 2-3 have a choice of approaches, from
does what in the chain (Fearne and Hughes,
the most effective (which involve meeting with
1999). From this information, it is possible to
customers and consumers), to the least expensive
know how the product flows along the chain, and
(which can be just classroom-based).
which activities offer scope for reducing waste
 A Trainers Manual 25

(the second half of this activity) and create value Retailers: shopkeepers; stallholders;
(Activities 2-4). Accordingly, Task 1 below involves street vendors; supermarket chains;
mapping the chain, and Task 2 uses the map to farmers selling direct; institutions,
identify where waste occurs, and what causes it. eg schools and hospitals; hotels and
restaurants, and
Waste is: Consumers: shoppers and their families.
any product that is not consumed
any product that sells for a lower price For each of the main actors, the maps should list
than it could sell for elsewhere what activities they undertake. Then the map
making a product better than it needs is used to identify not where waste occurs, but
to be where it is caused.
undertaking unnecessary activities
applying unnecessary/excessive inputs 3.2.3. Examples of Value Chain Maps
The factors affecting waste include: The first example is a mango export value chain.
quality of seeds and other inputs The first task was to identify all the inputs (left
production techniques hand column), and then the main activities
speed from farm-to-consumer along the chain and who undertook them. Next,
packaging and handling chain members traced the activities that created
shelf-life and preserving produce the most waste (circled in red on the map). For
grading to direct the right quantity and example, harvest was seen as a significant cause of
quality to different outlets, and ensure waste, because poor handling of the fruit at that
as much as possible is sold stage would be revealed days or even weeks later
when the fruit started to show damage, by which
These activities are spread across the chain, and time it was either being graded or was even on
explain why a value chains ability to improve display in the supermarket.
efficiency by reducing waste is dependent on
concerted action across the chain.

This activity involves mapping the chain from

input suppliers to the final customers and
consumers to identify who is involved in getting
product from farms to these consumers, and
where and why waste occurs. Course participants
create a map of the main people involved in a
specific vegetable value chain that represents
a promising market opportunity. Typically, the
members are a combination of:

Input suppliers: seeds, chemicals,

compost, equipment, advice, finance
etc
Producers: principally involved in
farming activities, but potentially
extending to some postharvest
processing;
Graders/collectors/traders/
wholesalers: involved in sorting,
transporting and storing;
Processors: undertaking cleaning,
processing, packing and labelling,
26 Value Chain Thinking

Mapping Waste
Mango Export Value Chain
Inputs Producer Importer Retailer Consumers
Genetics/ Tree Intake Intake at Purchase
planting planting Storage warehouse
Transport
material Growing Storage
Ripening Store
Fertilisers crop Distribute
Grading Eat
Pesticides Harvest to stores
Pre-packing
Water Grading Display
Dispatch
Equipment Packing
Packaging Cooling/
materials storage
Advice Export

Figure 3.1: Mango export value chain

The second example is a fresh tomato chain. Again, the main inputs and activities along the chain were
mapped. Notably, participants identified labour as a wasteful activity because they felt many farmers
were not well trained and were not using their time and skills effectively, for example through poor
planting, hence that activity was also highlighted as a source of waste.

Mapping Waste
Tomato Value Chain
Inputs Farmers Retailer Consumers
Seed (variety) Prepare land Buy Buy
Pesticides Plant Transport Store
Fertiliser Crop practices Grade Process
Water Add manure Store Eat
Labour Spray Sell
Equipment Weed
and tools Water
Advice Monitor
Harvest
Sell

Figure 3.2: Tomato value chain

 A Trainers Manual 27

EXERCISE 1: Where does waste occur in value chains, and what

causes it?
Task 1 Mapping the Value Chain
This activity helps course participants to identify the main activities in their value chains and the
chain members who perform them, and so appreciate the interdependencies between chain
actors.

Split participants into groups of 3-5 people, with each group working separately, before coming
together to explain and discuss their results. Ask each group to identify the inputs and activities
in order along a value chain serving a particular market they may wish to supply, using words or
pictures on different pieces of paper/sticky notes, for example attached to flipchart paper (as
shown below). Use of sticky notes makes it easier for groups to correct mistakes, or to add in
forgotten activities.

Groups can be asked to look at:

different crops to reveal how activities vary

he same crop but different routes to market, highlighting where the chain splits to link
to different customers and consumers

Participants should place all the activities in order from inputs into farming through to
consumption of the final product, and grouped into columns under the chain actors who
undertake the activity. Some activities can be undertaken by different members of the chain,
and Activity 5 will encourage farmers to consider opportunities to undertake more postharvest
activities and so earn a larger slice of the pie.

Figure
3.3: Value
chain map
produced
using sticky
notes
28 Value Chain Thinking

Having brought the groups back together, ask them to explain the maps they have prepared,
and encourage discussions comparing value chains for different products and markets. Can
participants see any advantages in being part of particular chains compared to others?

Task 2 Mapping where waste occurs, and discussing how to reduce it

Ask participants to think about where waste occurs in the upstream end (on-farm) and
downstream end (markets, consumers) of the chain, and then identify those activities causing
that waste. As shown below, participants should write a W on those activities which are most
critical to reducing waste and to making the value chain more efficient in order to grow the pie.

Figure 3.4: Value chain map highlighting key activities to reducing waste

Use the task to encourage discussion. For example:

is waste on a shelf or stall caused by poor sorting, grading or washing?

is waste on-farm caused by poor inputs or skills, and how could farmers tackle these
problems?
Are any activities duplicated? For example, does grading often occur more than once?
This is a form of waste, so ask why it happens and how the duplication could be
eliminated.
These results should feed into each participants Action Plan:

What will they do to reduce waste?

What extra training or different inputs might they need?
 A Trainers Manual 29

3.3 Preparing for Activities 2, 3 and 3.4 ACTIVITY 2 - WHAT DO

4: Identifying Market Opportunities CONSUMERS WANT?
One of Value Chain Thinkings critical success
3.4.1 Key messages
factors is whether farmers develop greater market
orientation in choosing what to grow and how to 1. Size of the pie: the total price
grow it, and then selecting customers who will paid by consumers determines the
enable them to exploit market opportunities. maximum amount of money that can be
These opportunities include: distributed upstream. So, to increase
their incomes, chain members either
any market outlet where higher returns
may come from better products and a. Leave the size of the pie the same,
service but fight on making their slice of the
reducing waste pie bigger by making someone elses
stronger partnerships along the chain slice smaller, or
shorter supply chains
b. Grow the pie, by making their
This might involve supplying supermarkets, hotels, products and services more
farmers markets, schools, branding etc. attractive to consumers, and then
sharing the benefits, and so growing
Encouraging this market orientation is the the size of everyones slice.
objective of Activities 2-4. However, prior to
commencing these activities, trainers need to 2. To increase income, farmers need
investigate promising market opportunities which to start by identifying promising
participants could pursue. This may include market opportunities and delivering
seeking advice from other well-informed people the priorities for exploiting those
and reviewing any formal market research which opportunities, thereby breaking free
has been completed by government departments, from the crowd and reducing the level
NGOs, universities, etc. Ideas could be validated of competition.
through consumer interviews or surveys. Invest
time on this research; do not rely on training 3. Do not assume that all consumers
participants assumptions about the market. want the same things, or that you know
Further details of how this could be done are what they want. Ask them!
set out in Chapter One (Step 1): The 7 Steps to
Connecting Farmers to New Markets. 3.4.2 Background
Firstly, it is important to distinguish between
customers and consumers:

Consumers are individuals who eat the

final product, so they determine the size
of the pie. Their needs vary, so we need
to know who they are in each value
chain.
Customers are businesses who buy
products, so they control access to
consumers. Their needs usually include
reliability and consistency: Deliver
what I want, when I need it.
30 Value Chain Thinking

Understanding consumers underpins Value Chain that farmers understand the market
Thinking. Lack of knowledge about what influences they often do not and they base
consumers behaviour results in squandering time subsequent decisions on their own
and money on producing products which are not assumptions, which is a common and
valued, and so they do not grow the pie. This significant mistake. Anecdotes are not
includes recognising the differences amongst evidence!
consumers: they are not all the same, and they
look for different things. Whilst price is critical to 2. Informal focus group of shoppers or a
many, some will be willing to pay more or become field trip to meet shoppers. Participants
more loyal for products that are fresher, better should ask about those characteristics
tasting, look better or have higher nutritional consumers want from the product the
benefits. Postharvest processing and packaging farmers are interested in which would
matters to some shoppers if this makes products change their behaviour beneficially (buy
more interesting or convenient to use, or extends more; pay more; have more loyalty a
their shelf-life. supplier or brand). This includes:

This knowledge should inform farmers Action Which stall/shop from which
Plans about what to grow, how much and of what they buy food
quality, and: How they decide what to buy
How much they buy
How to create additional value (Activity How much they are willing
4), including from postharvest activities to pay
(Activity 5). What would encourage
Which customers will enable them to them to buy more, such as
target those market opportunities, and greater convenience; better
how to secure their business (Activity 3). hygiene; packaging; better
quality? Ensure shoppers
explain what exactly they
mean by quality: is it
3.4.3 Activity appearance, and if so, is it
Trainers should explain the key messages and colour, shape, size, blemishes
how reflecting them in Action Plans will increase etc.? Is it flavour, and if so,
participants income, based on finding market is it tenderness, ripeness,
opportunities where price is not the only factor. juiciness, sweetness etc.?
This will involve:
3. Use existing market analysis as a basis
Exploring what consumers and final for discussion.
customers want.
Working out how to provide those
products and services.
Prioritising farmers training, money and
time on those activities, suppliers and
customers which will generate the best
returns.

This exercise could include three tasks:

1. The simplest but least effective

approach would be to have a group
discussion amongst the trainees. The
risk is that this perpetuates the idea
 A Trainers Manual 31

3.5 ACTIVITY 3 WHAT DO What types of consumers are more

attractive, and what distinguishes them?
CUSTOMERS WANT? Do you know what your consumers
3.5.1 Key message want?
Getting access to market opportunities, especially Where and how much waste is
to higher value consumers, means providing generated in your shop/hotel etc? Are
the product and service that the specific final the causes of this waste understood;
customer (retailer, hotel catering manager etc.) what efforts have been made to reduce
requires - and the most valuable final customers the waste, and with what impact; and
are likely to require better service. what is preventing further reductions?
How much variability is there in the
supply and demand for particular
vegetables (daily, weekly, seasonally
3.5.2 What are the product and service and annually)? Is it predictable? How
priorities for customers? is this managed; does it produce waste
This activity helps participants to learn about or selling products for less than they
the critical issues that final customers need, for are worth, and what could be done to
example quantity, frequency of delivery, reliability, improve the situation?
packaging, grading, shelf-life etc. Meeting Are there problems with fulfilling orders
customers helps participants to learn more about for particular vegetables? Are these
both market opportunities, including where problems to do with availability in terms
customers have demand for a product but cannot of volume or quality? If some suppliers
get it on terms they want, and the most critical are more reliable, why is this, and what
aspects of service that suppliers need to provide should we learn from them?
to gain access to those opportunities. Tasks might What other risks do you face that are
include: caused, or potentially could be reduced,
by your suppliers?
1. Group discussions with a range of Do you tend to deal with the same
customers (shop buyers, stallholders, suppliers, or swap around? Why?
catering managers, wholesalers), which If you do not currently buy direct for
would allow participants to compare farmers, would you be interested in
the different challenges, and so assess this?
which ones would suit their own Are there formal contracts or informal/
resources and capacity verbal agreements? If so, how long
ahead do they go?
2. Field trips to meet different potential How do you incentivise/reward better
customers, which would be more suppliers?
convenient for them, and What do you look for in a good
supplier?
3. Role playing, with farmers playing Do you discuss longer term plans with
the part of different customers, trying your suppliers?
to imagine what would be important to Do conflicts ever arise with suppliers,
different businesses. and how are these resolved?
Do you have any other frustrations with
The types of questions for participants to ask sourcing the product, and how could
customers are: they be eliminated?

How do you choose what to sell? What

are you looking for the products you
buy? How do you assess quality?
What are your shoppers/guests like?
32 Value Chain Thinking

3.6 ACTIVITY 4 CREATING to maintain the habit of buying the product

consistently, and finally, ensure the product was
VALUE packed and labelled/branded to distinguish it
clearly from similar vegetables but which did not
offer the same assurances. This branding helped
3.6.1 Key message consumers to find the product easily on shops
Growing the pie requires: shelves.

Knowing what influences shoppers and

customers behaviour/decisions.

Focusing on those activities along the

chain which create value, which unless
farmers supply consumers or final
customers directly, means working with
others to create value and deliver levels
of service which will gain access to
higher value markets (Activity 6).

3.6.2 Background
This activity uses the same process as mapping
waste in Activity 1. However, instead of identifying
the sources and causes of waste, it looks at what
product characteristics and services are required
downstream, as identified during Activities 2 and
3. These are listed in the final column of the value
chain maps, and then traced upstream to see how
those characteristics are derived, such as choice of
variety, production, postharvest processing, speed
to market etc. Again, the objective is to help
participants prioritise the use of their resources
and training, and identify what further advice they
need.

3.6.3 Examples of Mapping Value

The first value map is based on the case study of
the Iraq al Amir Womens Cooperative in Jordan
(see Case Study 2, page 16). In summary, the
market opportunity was green/spring onions
which were produced with less/safe pesticides,
and which guaranteed a fairer return to farmers
(right hand column in map below). The value
chain map then shows which activities created that
value, and therefore helped farmers to prioritise
their resources and training. For example, it was
important to have uncontaminated water; only
use known (labelled) and approved pesticides;
cooperate amongst farmers to provide the volume
and length of season that consumers needed
 A Trainers Manual 33

Mapping Value
Low/safe pesticide Spring Onions Value Chain
Inputs Farmer Retailers Consumers
Seeds Prepare land Buy What affects
Pesticides Produce Transport behaviour?
Manure seedlings Grade Food safety
Water Transplant Pack and through
Labour Water label minimum
Equipment: Weed Store use of
irrigation & Pest control Sell approved
spraying pesticides
Harvest
Advice Grade Higher
Transport returns to
Sell farmers
Cooperate

Figure 3.5: Spring onion value chain

This second example shows a value chain supplying sweet potatoes to hotels. Only the colour of the
potato (through varietal selection) is considered significant in terms of product quality, with hotel
catering managers placing more emphasis to suppliers consistency, for which harvesting and grading are
important, and reliability, which needs farmers to cooperate so that orders timing and quantity were
always met.

Mapping Value
Sweet Potato to Hotels Value Chain
Inputs Farmer Wholesaler Hotel
Seed (variety) Prepare land Buy What affects
Pesticides Seed treatment Transport behaviour?
Manure Sow Store
Water Add manure Sell Yellow colour
Equipment Spray Consistency
and tools Weed Reliability of
delivery
Water
Harvest
Grade
Pack
Store
Cooperate

Figure 3.6: Sweet potato hotel value chain

34 Value Chain Thinking

In the next example, a pork value chain, two distinct groups of consumers were identified as potentially
offering higher returns. The first were discerning consumers given their willingness to pay more for a
product which was tastier and juicier than standard pork. Expert advice recommended that switching to
a different breed and using alternative feed would result in a more attractive product, so those inputs are
ringed in red. The second group was healthy consumers, who were particularly concerned about having
lower fat meat produced from pigs which were not routinely fed antibiotics. Breed and feed were again
important (though different breeds and feeds to supplying discerning consumers), and so was raising the
pigs in less intensive conditions which eliminated the need for routine use of antibiotics.

Mapping Value
Pork to both Discerning and Healthy Consumers
Value Chain
Processing
Inputs Pig Farms plant
Supermarket Consumers
Genetics Housing Slaughter Ordering Discerning
Taste
Antibiotics Husbandry Blanching Intake
Juiciness
Feed Breeding De-hair Display

Feeding Butchering Healthy

Low fat
Growing Packaging
Free from anti-
Finishing Storage biotics

Transport Dispatch

Figure 3.7: Pork value chain

The final example explores the requirements of some retailers and consumers for tomatoes which have
a longer shelf-life, so reducing waste. Multiple sources of value were identified by chain members,
including varietal selection; advice to improve monitoring and harvesting, as well as investing in shade
both on-farm and by stallholders.
 A Trainers Manual 35

Mapping Value
Longer Shelf-life Tomatoes Value Chain
Inputs Farmer Retailer Consumers
Seed (variety) Prepare land Longer shelf What affects
Pesticides Plant life behaviour?
Fertiliser Crop practices Buy
Water Add manure Transport Ripeness and
durability
Labour Spray Grade
Consistency
Equipment Weed Shade/cool
and tools Water Sell
Advice Monitor
Harvest
Shade/cool
Sell

Figure 3.8: Long shelf-life tomato value chain

EXERCISE 2: What increases value of a product, and

where is this created in the value chain?
Using the same value chain maps as produced in Activity 1 about reducing waste, course
participants should identify how/where consumer value is created, and what activities are critical
to delivering the service the final customer needs.

Back in small groups, the first step is for participants to list what they learnt from Activities 2 and 3
about what consumers and customers value about the products they are investigating. Then, they
should discuss which activities are responsible for those product characteristics or service: who/
what is involved?

This might involve:

particular inputs
special attention to some farming practices or postharvest processing such as grading,
sorting and packing
speed to market
how retailers present the product to shoppers

Groups may find the discussion reveals they need to add new activities to their map. Then each
important activity should be marked with a V, as shown in Figure 3.3. Encourage groups to
present their conclusions to each other, and share what they have learnt.
36 Value Chain Thinking

Figure 3.9: Value chain map showing activities that are key to creating value
Having identified critical inputs and activities, ensure that participants include the findings in
their Action Plans. Do they need further training on optimising activities, or require ongoing
advice from extension staff? Do they need to meet with potential seed suppliers to explore
whether they can find a reliable source of the seed variety and quality they will require?

3.7 ACTIVITY 5 POSTHARVEST effectively, like grading, either because this

relieves customers of the task, or because any
OPPORTUNITIES FOR FARMERS lower grade produce could be channelled to other
customers rather than discarded. In the example
below from the Jordanian womens cooperative,
3.7.1 Key message the farmers identified that they needed to take on
Farmers should consider postharvest activities responsibility for packing and labelling rather than
if this makes them more attractive to high value leaving it to retailers. This meant their product
customers, or allows them to earn a higher was segregated throughout the supply chain, and
income. so maximised the chance of it selling for its true
value, rather than being mixed with standard
3.7.2 Background green onions and sold at a lower price.
The objective is to encourage participants to
think about what postharvest activities would
increase their potential income, and/or make
them preferred suppliers for higher value markets.
This might involve doing some activities more
 A Trainers Manual 37

Postharvest Opportunities
Low/safe pesticide-produced Spring Onions
Inputs Farmers Retailer Consumers
Seeds Prepare land Buy Buy
Pesticides Produce Transport Transport
Manure seedlings Grade Store
Water Transplant Pack and Cook
Labour Water label Consume
Equipment: Weed Store
irrigation & Pest control Sell
spraying Harvest
Advice Grade
Transport
Sell

Figure 3.10: Low pesticide spring onion value chain

3.7.3 Activity reward product and service quality, and

Use the value chain maps already produced for commitment
waste and value to discuss which postharvest
activities farmers could do either to increase Accordingly, critical partners are those who:
their income (recognising that many activities will
increase their costs and/or require extra time) are committed and able to reduce waste
or to make them more attractive suppliers to and create value
their customers, and so improve their access to supply important inputs, and/or
higher value market opportunities. Do they need provide access to higher value markets
additional training? If so, ensure this is recorded
in their Action Plans. Farmers need to select critical partners, and then
build cooperation and commitment.

3.8.2 Background
3.8 ACTIVITY 6 WORKING Value Chain Thinking involves a deliberate decision
AS PARTNERS: HOW TO by chain members to work together to improve
PICK PARTNERS AND BUILD their returns by delivering better services to each
other and the type of product their consumers
RELATIONSHIPS want (Collins et al., 2015). It does not just
happen, and it is not easy but it does increase
incomes. Accordingly, farmers need to build
3.8.1 Key messages relationships with those chain members who
are critical to the success of their Action Plan. In
Value Chain Thinking requires a collective decision return, those partners also need to recognise their
by key chain members to interdependence, and so develop commitment
and share benefits to take advantage of market
focus on delivering target consumers opportunities.
needs
provide better service to customers
38 Value Chain Thinking

The foundations for strong relationships amongst to information can also vary between men
value chain partners are shared objectives and and women across the value chain, potentially
motivations, and then complementary resources reducing the chains effectiveness, and diminishing
(skills, land, finance, equipment, access to market the equitable division of resources and benefits.
etc). These foundations need to be built upon by In all discussions, the causes and consequences of
partners attitudes and behaviours, including: such gender distinctions should be addressed.

understanding each others abilities and Partnerships may also include cooperating
requirements with other farmers, to bulk up supplies, and so
open communication increase scale and availability to attract buyers
reliability and honouring commitments and potentially increase the price offered, and
sharing risks, costs and rewards, to negotiate lower prices for inputs. However,
including through incentives such cooperation needs leadership, organisation,
working together to solve problems, mutual trust and common vision to overcome the
while also pre-emptively preventing challenges. These include:
issues arising.
coordinating sowing and harvesting,
In combination, these foundations and and sometimes sorting, grading &/or
behaviours lead to more trust, cooperation and packing
commitment; and less opportunism, conflict agreeing varieties to suit a single market
and abuse of power/dependence (Hobbs et al., and a production schedule (not each
2000). Cooperation is when value chain members farmers preference)
collectively respond to market opportunities and
threats. It increases as relationships become In addition, womens participation in formal
more committed, moving from spot market and farmer cooperatives can be constrained by
one-off transactions; to repeated sales; to formal/ membership requirements, for example, when
informal contracts between farmers, traders and based on formal land ownership and capital. Such
retailers, and finally close partnership. Building barriers to their involvement should be removed.
partnerships relies on farmers following the five There are a number of practical steps which can
rules of being a good supplier: strengthen relationships, though it may take
several years to achieve them all:
Negotiate: Select suppliers and
customers, and negotiate price 1. Developing agreed objectives and
Commit: Build relationship; resist expectations in terms of focusing
opportunism on consumers, final customers and
Deliver: Volume and quality (grading) improving efficiency.
consistently be reliable
2. Developing terms of trade and
Monitor: Constantly check what the
incentives which help to share
market and customers require, by asking
higher returns (from growing the
for feedback
pie) by rewarding those behaviours
React: When performance differs from
and activities which create value
customer/consumer expectations, act
and improve commitment, volume,
on the feedback
reliability and efficiency.
Chain members also need information to flow 3. Learning about each others
to make decisions which improve the chains businesses, and so appreciating
performance. These flows typically reflect the what contribution others make, and
nature of relationships, for example, withholding what risks they shoulder, which will
information is often a result of an abuse of power reveal the inter-dependence within
or lack of trust, while effective flows come as the chain. Conversely, ignorance
mutual benefits are gradually realised. Access and suspicion can breed distrust.
 A Trainers Manual 39

4. Solving problems, like reducing 3.8.3 Example

waste, through mutual commitment The value chain maps can be used to identify
of time, money, expertise and critical partners (Collins et al, 2015). In the
bearing risks. Those who do not example of the mango export value chain, it is
contribute to making improvements evident that to deliver what consumers valued
do not earn a right to share the sweet and ripe fruit it is essential that the
rewards. importer ripens the fruit expertly, and carefully
5. While contracts may be formal selects individual mangoes to send to retailers
or verbal, placing emphasis on only when they are in peak condition. Accordingly,
them being long term; rewarding for the producers to maximise the market
reliability and improvement. Where opportunity, they needed to find the best importer
arrangements are vague, parties with the skills and commitment to undertake
must resist the temptation to take these activities effectively.
advantage; commitments should
always be honoured.
6. Communicating openly, honestly
and ensuring consistency between
words and actions. In time, sensitive
information should be shared,
confident that confidentiality will
be respected and trust will not be
abused. Even when everyone is
busy with their day-to-day business,
ongoing communication helps build
commitment. Feedback should be
given constructively, and action
taken in response where necessary.
7. Working with input suppliers to
ensure availability to critical inputs
of the necessary quality/varieties.
8. Agreeing what postharvest
processing would grow the pie
by meeting retailers and their
shoppers needs.
9. Keeping the chains strategy
under review given that the
context (consumers, competition,
technology, best practice, etc.) is
dynamic.
40 Value Chain Thinking

Working as Partners
Mango Export Value Chain

Inputs Producer Importer Retailer Consumers

Genetics/ Tree Storage Intake at What
planting planting Ripening warehouse matters:
material Growing Storage
Grading
Fertilisers crop Distribute Sweetness
Pre-packing
Pesticides Harvesting to stores
Dispatch Ripeness
Water Grading Display
Equipment Packing Shelf life
Packaging Cooling/
materials storage
Advice Logistics

Figure 3.11: Mango export value chain

3.8.4 Activity What are the likely levels of demand

Using the value chain maps, trainers should and availability? What coordination
discuss with participants which relationships are is needed of production and orders/
most important, including potentially with other delivery amongst farmers, and between
farmers. farmers and customers?

Once participants have decided which market

opportunities to pursue through their Action Plans, 3.9 ACTIVITY 7 LEARNING
trainers should help participants arrange and FROM AN EXISTING VEGETABLE
conduct meetings with partners who are critical to
implementing their Action Plans. Trainers should VALUE CHAIN
help participants plan the discussion, which could
be based around the following issues:
3.9.1 Background
Do partners agree with the maps of the This activity provides participants with the
chain? opportunity to learn from an existing value chain.
This will teach them about different parts of a
Do they agree about what specific specific chain, and the practical challenges and
consumers value, and the services benefits to applying Value Chain Thinking. The
required by the final customer? activity is known as walking the chain, and can
Can they agree terms of trade which be a very illuminating experience. It involves
reward creating value, reducing waste meeting chain members to ask questions in order
and improving quality, volume, services, to understand the chains structure; what its
commitment and reliability? consumers value about vegetables and whether/
how this is reflected in decision upstream, and
What information does everyone need
how relationships are affecting the chains ability
(quality; delivery quantities and timing
to grow the pie by creating value and reducing
etc.), and how will this information be
waste.
found and shared?
How can farmers ensure they remain
preferred suppliers?
 A Trainers Manual 41

3.9.2 Activity
Trainers may need to use contacts and facilitators access to resources (land, finance,
to gain the cooperation of chain members, since transport etc)
the benefits of the activity will depend upon how inclusion in decision-making
open those individuals are with their answers. It division of labour
is important that each team is well prepared with building partnerships
questions and for recording answers the same receiving the benefits of Value
questions suggested for Activity 3 could be used Chain Thinking, and so encouraging
here, as well as the checklist of issues provided in the behaviour required to sustain
Activity 6. collaboration

Participants should have discussions during Both men and women farmers should be involved
the activity about what they are learning, and in suggesting potential solutions to improve
to decide on whether this suggests additional gender equity. However, it may also be helpful to
questions to ask in later interviews. Finally, have separate discussions in single sex groups.
participants need to draw lessons for their own Female participants could be asked to debate:
Action Plans.
How do women farmers interact with
men and women among different
3.10 ACTIVITY 8 GENDER types of value chain members (input
suppliers, traders, retailers, consumers
EQUITY IN VALUE CHAINS etc.)?
What type of constraints do women
face with each of these interactions,
3.10.1 Background
and how does that affect the scope for
Social norms and behaviour between genders may Value Chain Thinking?
reduce a value chains performance. For example, As female farmers, how could they
men and women across the value chain may have change behaviour to strengthen their
different attitudes to cooperation amongst farmers position in the value chain, and how
and with suppliers and customers. Similarly, if should this be reflected in their Action
women in a culture do most of the shopping, Plans?
then male farmers may understand less about Similarly, male participants could discuss:
what shoppers want and make decisions based
on incorrect assumptions. Access to resources like How do male farmers interact with men
training might also affect genders differently. or women along the value chain (input
suppliers, traders, retailers, consumers
3.10.2 Activity etc.)?
Participants should discuss the different roles How do male chain members support or
of women and men in the value chain. They can marginalise women in the value chain?
use the value chain maps to identify the typical What impact does this have on value
roles of males and females in the value chain by chains effectiveness and opportunities
marking each activity with an M for males and/or to grow the pie, and everyones share of
F for females. Then they should discuss how the that pie?
behaviours and constraints encountered by female
How should male behaviour change
and male producers, processors and retailers
to avoid marginalising women? How
may prevent Value Chain Thinking, for example
should this be reflected in their Action
through:
Plans?
42 Value Chain Thinking

3.11 ACTIVITY 9 PREPARING AN on the activities farmers can undertake to

differentiate themselves from their competitors
ACTION PLAN in serving higher value market opportunities. If a
farmer does not prioritise what will be attractive
downstream (more value; lower waste; stronger
3.11.1 Key Messages partnerships), they are doomed to compete on
1. To increase their income, farmers need to price, because they cannot distinguish themselves
decide: in any other way from competing farmers.

What and how to grow, and how could Trainers need to help each participant to develop
they improve their returns by reducing an Action Plan based on Value Chain Thinking.
waste (Activity 1) and creating the This means the plan:
quality of product to suit particular
market opportunities (Activity 2) Is market-orientated by identifying
How to be preferred suppliers by market opportunities, and what that
delivering the service needed by the means in terms of delivering consumers
final customers who provide access to needs, so that produce is pulled through
those market opportunities (Activity 3); the chain to meet their demands, rather
than pushed through the chain based
Whether to undertake additional on what is produced upstream;
postharvest activities, like processing or
grading (Activity 5), and Fits the size of market opportunities
with volumes available. If a farmer
How to pick partners and build is only willing to work alone, s/he
relationships (Activity 6) will only be able to serve a small
market opportunity. Even working in
2. What must farmers excel at? Their Action cooperation, farmers need to balance
Plan should focus training, time, skills, advice and their ambition with their capacity to
money on being excellent at those activities which meet customers requirements in terms
contribute most to distinguishing them from the of volume and reliability, especially
crowd, and so increasing their income. given the inherent uncertainties in
agricultural production. It is better to
3. Having identified critical activities, ensure the start small and take small steps, than be
Action Plan includes: too ambitious and fail.
Reflects each farmers training needs,
Prioritising further production and interests, skills and capacity. In
postharvest training and advice; and particular, it balances each farmers
Identifying critical inputs, and then aspirations in terms of production of:
seeking advice on getting the type/
quality needed, for example from Crops for Consumption for the
extension staff, and meeting with critical farmers own family
suppliers, such as seeds. Crops for Cash usually a
standard/commodity crop which
provides a relatively predictable,
if low, return to meet the
3.11.2 Background farmers need for income and
Activity 9 and producing the Action Plan are cashflow
the culmination of each participants learning Crops for Value which offer
from the course. It should bring together their higher returns based on Value
knowledge in production, postharvest processing Chain Thinking
and Value Chain Thinking. The aim is to focus
 A Trainers Manual 43

Justifies what to produce, how and for Farmers need to focus on these critical activities,
what route-to-market based on market so discuss with them what additional production
opportunities and the participants own and postharvest training would help them excel
resources (land, time, initial finance, at these activities. Similarly, having identified
inputs, skills, support from family etc.). key inputs, what advice can they get on how to
optimise them, for example from extension staff
Prioritises those inputs and activities,
or from meeting with potential seed suppliers?
including postharvest, which are
Build the answers into the Action Plan bringing
most critical to both creating value
in experts in finance, nutrition, production,
and reducing waste on-farm and
postharvest processing and retailing if necessary
downstream.
and use them to prioritise additional training.
Targets critical partners based on who
creates value, reduces waste or provides Trainers should also discuss with both male and
access to the market opportunities, female participants (together and individually)
and sets out specific actions on how to what constraints they may face in implementing
become a preferred supplier to those their Action Plan, and how these could be avoided.
critical partners.
Identifies what information will be References
needed before, during and after Fearne, A. and Hughes, D. (1999). Success factors in the
production, and how that information fresh produce supply chain: insights from the UK,
will be gathered and used. Sup. Chain Manag. 4 (3), 120-131.
Collins, R., Dent, B. and Bonney, L. (2015) A Guide
Ensures that gender norms do not
to Value Chain Analysis and Development for
prevent the value chain improving Overseas Development Assistance Projects,
its efficiency and effectiveness, or available free at http://aciar.gov.au/publication/
distributing the resultant benefits. mn178.
Hobbs, J.E., Cooney, A. and Fulton, M. (2000). Value
Lists what external support will be
Chains in The Agri-Food Sector: What are
needed, and how it will be obtained. they, How do they work and Are they for me?
Is dynamic and capable of adaption Department of Agricultural Economics, University
with experience and changing market of Saskatchewan, Saskatoon, Canada.
opportunities.

3.11.3 Activities
Using the maps created in Activities 1 and 4,
discuss those on-farm activities and choice of
inputs which have most influence on reducing
waste (Activity 1); creating the quality of product
the target consumers want (Activity 2), and
providing the service the customers need (Activity
3). These should be indicated with Vs for value
and Ws for waste on the map. There may also
be some postharvest activities immediately
downstream which farmers could undertake
(Activity 5) if they would enable them to capture
more value. Remember that if there are no Vs and
no Ws in a farmers list of activities, and they do
not build partnerships, they can only compete on
price, which constrains their potential income.
44 Value Chain Thinking

CHAPTER FOUR
Steps to Connecting Farmers to New
Markets
Chapter Four of this manual sets out a 7 Step process to connect farmers to those higher value markets
best suited to their skills, attitudes, resources and access to inputs. This 7 Step Guide has been used in
several case studies in countries where VINESA project is operating (Macharia et al., 2016). Part 4 starts
with a summary of the 7 Steps (Figure 4.1), and then explains each step in detail, concluding with advice
on preparing an Action Plan for each farmer. It is important to work through each step.
 A Trainers Manual 45

Figure 4.1. The 7 Steps to Connecting Farmers to New Markets

STEP 1: Create a list of potential market opportunities

Create a list of potential opportunities by speaking to supermarkets, hotel
operators, schools, local traders and wholesalers, and other key commercial
informants. Check secondary sources as well.

STEP 2: Identify farmers strengths and limitations

STEP 3: Compare market opportunities with farmers strengths and

limitations
This creates a short list of the most promising market opportunities.

STEP 4: Investigate the short list in detail

Survey local supermarket produce managers; catering managers at hotels; schools;
visit local wet markets; ask shoppers.

STEP 5: Let farmers decide

Work with farmers to decide on the opportunities that best suit their strengths and
limitations

STEP 6: Value Chain Meetings

Members need to agree on: quality and other product specifications; volumes,
schedules and prices; how vegetables will be promoted; how/when to provide
feedback to solve any problems; and improvements.

STEP 7: Finalise action plan with farmers

Cover the following topics: inputs, production, postharvest handling, information.
46 Value Chain Thinking

STEP 1: Create a list of potential market opportunities

What are we trying to do in Step 1? Speak to people who can help identify market
opportunities for farmers. These will be compared in Step 3 to farmers strengths and
limitations.

Remember: Value Chain Thinking is about farmers adopting an attitude of producing

what they can sell for the best price, rather than simply selling whatever they are
accustomed to growing.

Small-scale farmers often fail to benefit from available lucrative opportunities largely
due to their limited ability to participate in high value market chains (Weatherspoon and
Reardon, 2002) caused by lack of understanding about what products these markets
demand, when and in what volume and quality (Weinberger and Lumpkin, 2007). To help
small-scale vegetable growers overcome these major obstacles, one should initially make
a list of potential market opportunities by reviewing secondary sources, including reports
on consumer trends and opportunities for import substitution, as well talking to industry
experts and NGOs. Narrow down these opportunities by speaking to people who have
direct experience in supplying and selling the products being investigated. This might
include supermarkets, hotel operators, processing companies and kitchen managers at
schools, hospitals, and in the military. It is also worth talking to entrepreneurial traders/
wholesalers, meaning those who have a positive attitude to working with farmers to
supply new markets, rather than those who just want to protect the current situation and
focus on high volumes at low prices.

Explain at the start of each discussion that you are only interested in opportunities:
for a small number of farmers not for all the farmers in the region!
where these farmers can compete for higher prices because of their skills in
farming and Value Chain Thinking, not by offering lower prices.
Some examples of questions to ask are given in Table 1. Feel free to include other
questions that are appropriate to the situation.

Remember: While you are only looking for market opportunities for a small number
of farmers who want to be part of a specific value chain, dont forget that they can
work together with additional farmers to increase their production, yields and
cooperation if they want to supply a bigger market opportunity.

Remember: Assumptions are very risky! Gather evidence, not anecdotes.

 A Trainers Manual 47

Table 1: Examples of Questions to Gather Market Information

What quality is likely to be required, including postharvest activities like grading?

Products What quantity will customers want; how frequently and how does this change across
seasons? What are typical minimum purchase levels?

What are the trends in vegetable shopping, especially amongst wealthier shoppers/
diners/tourists?
What are the changes in where people shop, such as supermarkets versus wet markets,
Consumers / and the vegetables they are choosing?
Shoppers Are new market opportunities emerging where farmers are being slow to react, for
example, new ethnic populations?
Are some shoppers looking for new value-added products, like preserved vegetables,
sauces or other processed products?

What vegetables offer high or growing demand? Is there a shortage of any kinds of
vegetables? How does this vary across seasons? Why is supply too low, and how could
farmers or others in the supply chain solve this?
Where is there a realistic chance of substituting locally grown vegetables for imports?

Supplies Are there opportunities for branding, for example to provide an assurance of quality or
low pesticide use or being produced in a particular locality?
What is the typical price, and how does it vary across seasons? How are higher costs,
such as better inputs or packaging, offset by higher prices?
Are there regulations that could affect farmers responding to particular opportunities?
These could be regulations about food safety or market operations.

Who is involved in their supply chains? What benefits would encourage them to change
suppliers?
Suppliers Are existing suppliers unreliable? If so, precisely how, and why?
Are there cultural barriers affecting market opportunities, for example the involvement
of women?

Waste Is waste a big problem in the shop/hotel, etc? How could it be significantly reduced?
48 Value Chain Thinking

STEP 2: Identify farmers strengths and limitations

What are we trying to do in Step 2? By making a list of farmers specific strengths and
limitations, in Step 3 we can match them against the market opportunities found in Step
1 (Srivastava et al., 2005). This will help prioritise the most suitable opportunities for more
investigation.

Remember: Start where farmers are. A realistic assessment of potential market

opportunities must start with looking at farmers priorities, skills, resources (skills,
land, finance) and attitudes to change and cooperation.

To avoid investigating unsuitable opportunities, it is important to start by listing farmers'

strengths and limitations, and then deciding which market opportunities should be
looked at in more detail. To identify these strengths, ask what these farmers could offer
that would be more attractive to customers compared to other farmers? Equally, what
might limit farmers ability to meet customers requirements? Some examples are given in
Table 2, but these should be discussed and agreed with the farmers to make sure nothing
is missed.
 A Trainers Manual 49

Table 2: Examples of Strengths and Limitations

Skills (Remember: Additional training can be included in the Action Plan in Step 7.)
Their preference for balancing
- Crops for Consumption1
- Crops for Cash2
- Crops for Value3
Skills and Willingness to take some risks in return for potentially higher incomes? (Remember:
Attitudes Farmers might be more willing to take a risk if they can start by taking small steps -- for
instance, at first using only a small amount of land for "crops for value".)
Willingness to work with other farmers to have enough volume to supply customers, to
reduce risk of problems in fulfilling orders
Opportunities and constraints created by ethnic and gender issues
Knowledge of postharvest processing techniques

Land, including amount, soil, microclimate, location (is the production area known for
producing particular, high quality crops?)
Money
Resources Postharvest facilities to process and store
Time available to change to new practices. (Remember: In many cultures, this needs to
be considered separately for men and women in households because of their different
roles in the family and on the farm.)
Transport to market (availability and cost)

Seeds
Water
Access to Fertilisers and certified chemicals
inputs Packaging
Training and advice
Credit

1
Crops for Consumption: Grown for the farmers own family.
2
Crops for Cash: Usually a standard/commodity crop that provides a relatively
predictable, if low, return to meet the farmers need for income and cash flow.
3
Crops for Value: Offering higher returns based on Value Chain Thinking, but initially
returns may look more risky until confidence grows amongst value chain members.
50 Value Chain Thinking

STEP 3: Compare market opportunities with farmers strengths

and limitations

What are we trying to do in Step 3? By comparing the list of potential opportunities

produced in Step 1 to farmers strengths and limitations identified in Step 2, we can see
which ones are most promising and worth investigating in more detail.

Remember: Farmers become preferred suppliers by understanding what extra benefits

they can offer potential customers to make them change from their existing suppliers.

One approach is shown in Table 3. Start by listing the market opportunities down the left
hand side, and farmers strengths along the top. Then put ticks and crosses in each box
depending on whether farmers have, or could quickly develop, the strengths needed for
each opportunity (Note: This table only illustrates how this could be done, the list along
the top should be the specific strengths identified in Step 2). This should allow you to
create a short list of the 2-3 opportunities for which the farmers are most suited, which
will be investigated in more detail in the next step.

Table 3: Do farmers have what is required?

Postharvest
Skills Land Inputs Finance
processing

Market
Opportunity 1

Market
Opportunity 2

Market
Opportunity 3

Market
Opportunity 4

Other types of issues to consider in producing the short list include:

What volume of crop is required? Is it realistic that a farmer could supply that individually? If not,
are enough of them willing to work together?
Are there any formal or informal barriers, for example cartels controlling access to the market?
If farmers are cautious, could they start small, and then expand production as their confidence
builds? Would customers be happy to start by trialling the farmers as new suppliers, and then
increase the order once reliability and quality have been proven?
 A Trainers Manual 51

STEP 4: Investigate the short list in detail

What are we trying to do in Step 4? Having agreed a short list of market opportunities
in Step 3, investigate these in more detail. These opportunities should be the ones that
can give farmers higher returns compared to their cost of production (Atrill and McLaney,
2002). Depending on the short list, this could involve interviewing the supermarket
produce manager, or catering manager at the hotel or school identified as a potential
customer; visiting local wet markets to speak to stallholders; or talking to cooperative
traders and wholesalers. Ask about their needs for:
- Consistency in delivering quality
- Reliability in terms of delivering on time and with the expected volume
- Cost competition not the cheapest, but products that are suitable for their
specific market, and offered competitively
- Improvement how they expect suppliers to get better
Some examples of the types of questions to ask are given in Table 4a.
If at all possible, also investigate how shoppers in the chosen venues choose which
vegetables to buy. What Do Consumers Want? If this is not possible at this stage, it is
essential it is included in the Action Plan produced in Step 7 as a priority for the future.

Remember: Wherever practical, involve farmers in this process. It is an important skill

for them to have in the future as market opportunities change.
52 Value Chain Thinking

Table 4a: Examples of Questions to Ask Potential Customers

How do you choose what to sell?

Products What are you looking for in the products you buy?
How do you assess quality?

What are your shoppers/guests like?

Consumers/ What types of shoppers/guests are more attractive as potential customers, and what
Shoppers distinguishes them?
Do you know what your shoppers/guests want?

How much variability is there in supply and demand for particular vegetables (daily,
weekly, seasonally and annually)? Is it predictable? How is this managed? Does it
produce waste, or force you to sell products for less than they are worth? What could be
Supplies done to improve the situation?
Are there problems with fulfilling orders for particular vegetables? Are these problems
to do with availability in terms of volume or quality? If some suppliers are more reliable,
why is this, and what should we learn from them?

What problems are caused by your current suppliers? How could they be reduced?
What do you look for in a good supplier? Do you tend to deal with the same suppliers, or
swap around? Why?
Suppliers If you do not currently buy direct from farmers, would you be interested in this?
Are there formal contracts or informal/verbal agreements? If so, typically how long do
they last? How do you incentivise/reward better suppliers?
Would you be willing to agree longer term plans with your best suppliers?

Where and how much waste is generated in your shop, hotel, etc?
Waste Are the causes of this waste understood? What efforts have been made to reduce the
waste, and with what impact? What is preventing further reductions?
 A Trainers Manual 53

These types of questions could be supplemented by working through the short questionnaire
in Table 4b with each potential customer. Ask them to rate problems with current suppliers of
different vegetables that the farmers could grow.

Table 4b: Customer Survey

Potential Crops

Vegetable 1 Vegetable 2 Vegetable 3

Consistency of supply
(volume)

Freshness on arrival

Shelf-life

Taste

Blemishes (state nature of

blemish)

Food safety

Damage due to packing/

transport

Arrive ungraded/sorted, or
inaccurately graded

Currently insufficient supply

Growing consumer demand*

Current suppliers unreliable

Please add and score any

additional problems:

Assessment by customer *Growing consumer demand

1 = Not a problem 1 = Declining
2 = Some problems 2 = Static
3 = Significant problem 3 = Rising slowly
4 = Very significant problem 4 = Rising rapidly
54 Value Chain Thinking

STEP 5: Let farmers decide

What are we trying to do in Step 5? Farmers need to decide which 1 or 2 opportunities to

pursue by working through the results of Step 4.
Now that they have more details, the farmers should consider again which market options
and trading partners offer them better returns now and in the future, and would be best
suited to their strengths and limitations (Macharia et al., 2013). This involves identifying
members, inputs, and activities in each value chain. Next, identify which of these are
critical to the requirements of the market opportunity. Then, encourage the farmers to
discuss which opportunities are most attractive. The deciding factors will vary depending
on the chain, but some examples to work through are given in Table 5.

Remember: Value Chain Thinking is about targeting higher value market

opportunities and picking the right partners for strong relationships.

Table 5: Assessing Alternative Value Chains

Do they have the skills, attitudes, resources and inputs needed to be better than
Farmers competing farmers in the most critical activities, and so encourage prospective
strengths customers to change suppliers?
Is additional training available to build key strengths?

If serving the market opportunity requires cooperating with other farmers to bulk-up
supplies, they must commit to an agreement to work together.
Does the scope exist for developing the leadership, organisation, mutual trust and
common vision to overcome the challenges? Can the farmers reach agreement in
Working with practice?
other farmers
Can they grow varieties to suit the specific market opportunity and the production
schedule (not each farmers preference)?
Can they coordinate sowing and harvesting, and sometimes sorting, grading, and/
or packing?

Who are the downstream partners critical to getting the product to each market?
Will they commit to a plan for volume, timing, quality criteria, price, reducing waste,
and discussing other ways to improve?
Which customers seem most positive about building cooperative relationships with
Downstream suppliers? Were they:
partners - understanding about the challenges farmers face?
- willing to share information when interviewed?
- prepared to share risks, costs and rewards, including through incentives?
- ready to work together to solve problems, and pre-emptively preventing
issues from arising?

Other costs
What waste might occur, and how could that reduce profit?
What are the likely costs of transport?
 A Trainers Manual 55

STEP 6: Value Chain meetings

What are we trying to do in Step 6? Get farmers together with the most important
members of the chain to agree how they will work together.
Arrange meetings with the key members of the chain. These will be the people identified
on the value chain maps who are responsible for the most important inputs and activities.
One way to help them choose is to get them to map each potential value chain (Collins et
al., 2015). The meetings will agree quality and other specifications; schedule and volumes;
prices, etc. How to pick partners and build lasting relationships: A summary of topics for the
meetings is set out in Table 6.

Table 6: Sample of Topics for Value Chain Partners Meetings

Cover everything with implications for inputs, production, sorting, grading, storage and
transport, such as thresholds on:
- Freshness/shelf-life
- Cleanliness
- Appearance (colour, blemishes, etc.)
Quality
- Sanitary conditions
requirements
- Size/shape
- Maturity level
- Variety
- Chemical usage in production
- Other postharvest processing

Frequency of supply, packaging requirements, other ways buyer will work to support
farmers

Terms of sale Price and volumes across the season (estimate if necessary)
Payment:
- When will payment be made?
- Will it be cash/cheque/credit/mix?

Trading Are there other legal or financial requirements?

conditions Will the farmers have to produce documents about the chemicals they have used?

Suppliers How the vegetables will be promoted (in-store, to hotel guests, etc.) to highlight their
quality and provenance to consumers?

Feedback How and when will customers provide feedback to farmers to minimise problems,
improve performance and help build the relationship?
56 Value Chain Thinking

STEP 7: Finalise action plan with farmers

What are we trying to do in Step 7? It is essential that farmers have an action plan which
sets out in specific detail how they will achieve what was agreed in Step 6 with their
customers. The plan should state precisely who will do what and when.
A detailed explanation of developing Action Plans is given in the Core Activity of the Value
Chain Thinking Training Manual, Preparing an Action Plan (Dent et al., 2017). In summary,
each Action Plan should cover inputs, production and postharvest processing; the specific
agreements the parties have made to work together (including between the farmers); and
the flow of information along the chain (Table 7).

Table 7: Sample of Issues for Farmers Action Plans

How will farmers make sure the critical inputs are available when needed?
Inputs How will farmers get the money they need, especially to cover cash flow?
- What external support will be needed, and how will it be obtained?
For each farmer involved:
What to grow; how much to grow; when to plant and harvest; how to grow it.
How will critical activities be monitored to check everything is going to plan?

Production Are all the resources ready: land, time, finance, inputs, skills, involvement of family
members?
How will the value chain deal with variability in production? What happens if too little
can be harvested? What will happen to any excess production? How will the chain
ensure a high quality product is still sold at a profit?

How will the crops be processed (grading, washing, drying)?

Postharvest
How will they be stored to protect their quality and shelf-life?

If the farmers are working together:

- What is their formal agreement?
- Who will be in charge of negotiating with customers?
- Who will coordinate the farmers, and make sure they deliver on time, in
Working full and to the agreed quality?
together - Who will monitor the products downstream? Visiting the vegetables
where they are sold and talking to customers and shoppers will tell
farmers a lot about how to make further improvements.
Ensure the Action Plan includes money for any traveling involved in negotiation and
monitoring.

What information will farmers need before, during and after production? Who will
collect the information and how will it be communicated to everyone who needs it?
How could the chain gather better information on its target consumers (for example,
Information in-store observation and surveys)?
When will the key people along the chain gather together to review what can be
improved?
 A Trainers Manual 57

References
1. Atrill P, McLaney E (2002). Management Accounting for Non-Specialists. Pearson Education
Limited, Essex England. 3rd Edition.
2. Collins R, Dent B, Bonney L (2015). A Guide to Value Chain Analysis and Development for
Overseas Development Assistance Projects. Available at http://aciar.gov.au/publication/mn178.
3. Dent B, Macharia J, Aloyce A (2017). Value Chain Thinking: A Training Manual. World Vegetable
Center Publication No. 17-825.
4. Fearne A, Hughes D (1999). Success factors in the fresh produce supply chain: insights from the
UK. Supply Chain Management 4 (3), 120-131.
5. Macharia J, Dent B, Gondwe S, Kamba GD, Chilanga T (2016). Connecting Farmers to High Value
Markets: A Case Study of Smallholder Vegetable Growers in Ntcheu District, Malawi. ISTTH16
Conference, Cairns, Queensland, Australia, 20-25 November 2016.
6. Macharia J, Collins R, Sun T (2013). Value-based Consumer Segmentation: The Key to Sustainable
Agri-food Supply Chains. British Food Journal 115 (9), 1313-1328.
7. Reardon T, Timmer CP, Barrett CB, Berdegue J (2003). The rise of supermarkets in developing
countries: opportunities and challenges for agrifood products suppliers. American Journal of
Agricultural Economics 85 (5), 1140-6.
8. Srinivasulu R, Afari-Sefa, V, Apurba S, Nenguwo N (2015). Farmers Decisions to Participate
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worldveg.org
World Vegetable Center Eastern and Southern Africa
P.O. Box 10
Duluti, Arusha
TANZANIA